Rank sees return to sales growth in last 6 weeks

Reuters Staff

3 Min Read

LONDON (Reuters) - Rank Group (RNK.L) said on Friday it had seen a return to sales growth over the past six weeks as it passed the anniversary of legislation banning certain lucrative gaming machines from its bingo halls.

A game is played at a Mecca Bingo club in this handout photo. REUTERS/Rank Group/Handout

The bingo, casino, and online gaming firm, said that, in the six weeks to Oct 12, like-for-like revenue rose by 5 percent, reflecting the passing of the anniversary of the introduction of the Gambling Act in September 2007 and actions taken to address its negative effects.

However, in the 41 weeks to Oct 12, like-for-like sales had declined by 8 percent.

Rank was hit hard last year by both the Gambling Act and a smoking ban. Those factors, along with the economic downturn, led to a sharp decline in attendances.

The group said like-for-like sales at its 102 Mecca bingo clubs declined by 12 percent in the first 41 weeks with admissions down 12 percent and spend per head level with the same period the previous year.

In the six weeks since the start of September, like-for-like revenue grew by 2 percent, with an 8 percent rise in spend per head offsetting a 5 percent decline in admissions.

Rank said Mecca had benefited from the granting of licensing permission for 83 adult gaming centres located within Mecca Bingo properties, of which 64 are operational. That has enabled it to increase the amount of B3 high jackpot gaming machines that it operates to 660 from 406 at the start of the year.

However, the Gambling Commission is currently reviewing its guidance to local authorities over the centres.

Rank said trading at its 11 Top Rank Espana bingo clubs had continued to be affected by difficult economic conditions.

At its 34 Grosvenor Casinos, like-for-like revenue fell by 3 percent over the 41 weeks, but was up 14 percent in the last six weeks of the period.

Shares in Rank have outperformed the FTSE All Share Travel & Leisure Index .FTASX5750 by 3 percent since the start of the year, with concerns over the consumer downturn overshadowed by takeover speculation following stake building by Asia-based Guoco Group (0053.HK), which now has a 24 percent holding.

Reporting by Matthew Scuffham; Editing by Mike Nesbit and David Cowell